Immelt: No easy fix to economy

Published
7:00 pm EST, Friday, January 21, 2011

By JEFFREY R. IMMELT

Special to The Washington Post

President Obama has asked me to chair his new President's Council on Jobs and Competitiveness. I have served for the past two years on the President's Economic Recovery Advisory Board, and I look forward to leading the next phase of this effort as we transition from recovery to long-term growth. The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world.

Business leaders should provide expertise in service of our country. My predecessors at GE have done so, as have leaders of many other great American companies. There is always a healthy tension between the public and private sectors. However, we all share a responsibility to drive national competitiveness, particularly during economic unrest. This is one of those times.

My hope is that the council will be a sounding board for ideas and a catalyst for action on jobs and competitiveness. It will include small and large businesses, labor, economists and government. Areas that we will focus on include:

* Manufacturing and exports: We need a coordinated commitment among business, labor and government to expand our manufacturing base and increase exports. The assumption made by many that the United States could transition from a technology-based, export-oriented economic powerhouse to a services-led, consumption-based economy without any serious loss of jobs, prosperity or prestige was fundamentally wrong. But there is nothing inevitable about America's declining manufacturing competitiveness if we work together to reverse it. For example, we have returned many GE appliance manufacturing jobs to the States by collaborating with our unions and making our operations more efficient.

Working with Boeing CEO Jim McNerney, who leads the President's Export Council, the Council on Jobs and Competitiveness will look for ways to harness the power of international markets - home to more than 95 percent of the world's consumers. Currently, the United States ranks lowest among the world's largest manufacturing nations in the ratio of domestically produced goods sold overseas, or export intensity. We must set as our highest economic priority not just increasing our exports, as the president has pledged, but also making the United States the world's leading exporter in the 21st century.

* Free trade: America cannot expand its manufacturing base without greatly increasing the volume of goods it sells overseas. That is why I applaud the free-trade agreement recently concluded between the United States and South Korea, which will eliminate barriers to U.S. exports and support export-oriented jobs. We should seek to conclude trade and investment agreements with other fast-growing markets and modernize our systems for export finance and trade control. Those who advocate increasing domestic manufacturing jobs by erecting trade barriers have it exactly wrong.

* Innovation: Businesses should invest more of their cash and resources in advanced products and technologies that will create jobs in the United States, and government should incentivize this investment in innovation. Today, GE is investing more than ever in research and development - about 6 percent of revenue - aimed at solving challenges in transportation, energy and health care. As one of America's largest exporters, GE remains committed to producing more products in the United States, which is our home and largest market. In the past two years, GE has created about 6,000 manufacturing jobs in the States, many resulting from investments in innovations such as advanced batteries, which we will make at our 100-year-old plant in Schenectady, N.Y.

GE sells more than 96 percent of its products to the private sector, where America's future must be built. But government can help business invest in our shared future. A sound and competitive tax system and a partnership between business and government on education and innovation in areas where America can lead, such as clean energy, are essential to sustainable growth.

It is possible to be a competitive global enterprise and still care about your home. In fact, it is not just possible but imperative. There is no easy solution to "fix" the American economy. Persistent and high unemployment -- and the pessimism it breeds -- should not be accepted. We must work together to construct an economy that creates more opportunity for more people.

Jeffrey R. Immelt is chairman and chief executive of General Electric.